I won’t let go of MoneyGram.

On the one-year anniversary of the MoneyGram’s $18 million settlement with the Federal Trade Commission for its role in allowing gullible Americans to wire money to Canadian scammers, I went out and searched to see if it’s still happening.

It is.

I didn’t have to go far to find a victim. Only a few miles from Watchdog Nation HQ to find another victim of the Granny Scam who sent the money through MoneyGram, even though the company promises that it has cleaned up its act.

But first I must apologize to R. for passing on bad information. When a year ago, I first reported how MoneyGram had to pay $18 million back to customers who wired money to scammers, I attached an advice box to the column. (See last year’s video and Watchdog Nation report on MoneyGram here.)

The box stated, “If you were scammed in a MoneyGram wire transfer, here’s how you can apply for your part of the $18 million settlement.” I recommended calling MoneyGram and the Federal Trade Commission. That’s what MoneyGram and the FTC told me to tell readers at the time.

So R., who lives in Bedford, Texas followed my advice. A month before, he had received a letter telling him he won the Maple Leaf Lottery. His prize, he was advised, was $520,000! It made sense. He had traveled in Canada and entered a few contests. Now all he had to do was deposit the first prize check in his bank, then take that money and wire it to Canada for his taxes and fees so he could get the rest.

He did as told. A few days later, he got a note from his bank that the check was a counterfeit. He lost $4,000. (An embarrassed R. asks that he not be identified.)

My original notes from last year quote an FTC spokesman telling me, “We’ve got $18 million here, and that’s going to mean a bunch of money going back to defrauded consumers.”

Not to R.

“Nope,” he says. “Got nothing.”

After he filed complaints with MoneyGram and the FTC, he never heard back.

He asked for help, and I contacted MoneyGram on his behalf. A company spokeswoman verified that his claim was not included in the settlement because it came after the redress program had ended. Besides, R. had no proof that he faxed his complaint to MoneyGram in the first place. (Remember to get written or taped confirmation!)

An FTC spokesman tells me that the $18 million ran out almost immediately after the settlement was publicly announced.

“At that point, literally, both the FTC and MoneyGram were inundated with complaints from victims,” FTC’s Todd Kossow said.

If the new complaints had been added, “They would have diluted the pool,” he said.

He estimated that “the amount lost by consumers through fraud-induced money transfers using MoneyGram’s system likely was in the hundreds of millions of dollars for the years 2004 through 2008.”

R. wouldn’t have qualified anyway, Kossow explained, because, as MoneyGram stated, his transaction occurred after the qualifying period for settlements ended in 2008.

The government says 34,000 redress checks were mailed to victims — totaling $18 million. The average check was $520. But most victims lost a lot more than that in various scams in which money was wired to MoneyGram outlets in Canada.

The original FTC complaint accused MoneyGram of helping U.S. consumers transfer $84 million to scammers in this country and abroad. The FTC alleged that 10 percent of MoneyGram’s Canadian agents (134 employees) were involved in the scams as partners.

MoneyGram’s executives were warned and did nothing, the agency said. Company whistle-blowers were disciplined or fired. The FTC alleged that company leaders said fixing the problem was too costly.

At the time, MoneyGram announced that it would not fight the complaint to avoid “battling it out through a long and costly trial.”

Recently, MoneyGram spokeswoman Lori O’Briant told me the company has worked hard to beef up its anti-fraud efforts, including increasing fraud specialists on staff, using “a new multimillion dollar Fraud Prevention System that helps stop fraud before money is sent.” She said it also had built closer relationships with law enforcement agencies around the world, updated its money transfer forms to alert consumers of potential danger and improved its hiring practices.

So how’s that working?

Well, in September 2010, a 74-year-old Hurst, Texas woman was swindled out of $6,000 in “the granny scam” when she wired money to Canada thinking it was for her nephew. Hurst police tell me that $3,000 was wired through Western Union, and $3,000 was wired through MoneyGram.

R. says there’s really no policing to detect and punish those involved. “I even spoke to the Royal Canadian Mounted Police, and their attitude was, ‘We’ll be looking out for them. We know it’s happening, but it’s hard to catch them.’”

R. also filed a complaint with the U.S. Postal Inspection Service (his “winning” letter arrived in the mail). But nothing came of that, either. Service spokeswoman Amanda McMurrey says, “Typically, in these situations, there’s not much we can do except forward that on to the government of Canada.”

The best defense, she says, is to understand that a bank will deposit cash for a check into a person’s account in a few days, but if the bank later learns the check is a counterfeit, the account holder is responsible for repaying the money.

Requests for wire transfers are a telltale sign of a scam. Never wire money to anyone without double-checking the circumstances and individuals involved.

# # #

In fairness, Watchdog Nation wants to share MoneyGram’s response to the above in full:

“At MoneyGram, we take consumer fraud very seriously. Our ability to provide safe and reliable payment services for our consumers is critically important to our business.

“Over the last year, MoneyGram has renewed it commitment to preventing fraud. Measures undertaken by the company include:

• Tripled anti-fraud staff
• Intensified operational scrutiny of transactions with a new multi-million dollar Fraud Prevention System that helps stop fraud before money is sent
• Expanded global outreach with law enforcement and regulatory agencies
• Reporting to and communicating with FTC and partnering with other financial services providers, law enforcement agencies and industry councils to promote consumer awareness
• Updated our money transfer send form to better educate customer and raise awareness of scams
• Created new agent facing policy – enhanced requirements for applicants to become a MoneyGram agent, as well as enhanced agent education/training to mitigate fraud

“As a result of our actions, we have prevented more than $30 million dollars in fraud this year alone. In addition, fraudulent transactions sent from the United States to Canada have decreased by 75% since May (Canada has historically been one of the most active fraud corridors).

“Additionally, in order to protect and educate our customers we:

• Post warnings on our website on various kinds of scams, as well as warn consumers that MoneyGram should not be used for Internet purchases
• Clearly communicate and warn customers about possible fraudulent transactions on our money transfer forms – including asking if the customer is sending money for the purchase of a car, or rent an apartment, or claim a lottery, etc.
• Provide training for agents to help spot possible fraudulent transactions
• Clearly alert consumers to never send money to people they do not know
• We ask customers who believe they have been a victim of fraud to contact us at 1-(800)-MoneyGram as well as report it to local police. We can then work with police and federal authorities who will further investigate the scam.”

Lori O’Briant
Corporate Communications & Media Relations Manager
MoneyGram International

###

Read the FTC’s Consumer Alert “Money Transfers Can Be Risky Business”

###

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

Of all the people Watchdog Nation has tried to help in the past several years, Ruth Wingfield is our favorite.

Today, she celebrates her 100th birthday. That officially makes her the oldest citizen of Watchdog Nation in the world today.

I know she’s a citizen of Watchdog Nation because whenever she gets angry at someone trying to rip her off, her first instinct, after calling me, is to demand: “WHO REGULATES YOU? I’M GOING TO FILE A COMPLAINT.”

I met her in 2008 when Cigna, her health insurance company, did her a big bowl of wrong. She wrote a $4.80 check she owed them. But then, at 98 years old, she put the decimal point in the wrong place. She wrote the check for $480. And when she complained later, the company refused to give her the money back. They said it could take a month or more.

Here’s the story I told earlier of how she got her back money.

At the time, she couldn’t remember my name was Watchdog, so she called me “Dogpatch Guy” — and I put that in the story.  For weeks afterward,  people called me “Dogpatch Guy.”

“I put you on the map,” she jokes.

Anyway, she’s been ripped off before, and she doesn’t like it. Somebody cashed out one of her insurance policies years ago (without her knowledge), and the agent involved was fired. She also got angry after she received a free cell phone but later learned she had to pay large bills. She also bought a phone for hard-of-hearing adults that turned out to be a dud, too. So she’s real suspicious.

Maybe that’s why she’s lived to be 100.

In the video box at the top of this post, shot on her birthday, she tells about her latest escapade.

# # #

Final note: Wingfield was an outstanding semi-pro women’s basketball player in the 1930s. She played with the legendary Hazel Scott. Last week, Nancy Lieberman, probably the greatest American woman’s basketball player alive today, presented Wingfield with a cake and an autographed basketball.

# # #

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

Here’s a statistic that alarms Watchdog Nation more than any other: According to a new survey, 1 out of 5 Americans age 65 or older have “been taken advantage of financially in terms of an inappropriate investment, unreasonably high fees for financial services or outright fraud.” Read the survey here.

Advisers are about to be reigned in somewhat with the new consumer financial protection bill weaving through Congress. One provision requires full disclosure of broker fees, commissions and other charges levied on investors. In the past, some folks thought if they invested $50,000 they actually invested $50,000. Read about one such case here.

Here’s another example of duplicity that ensnared investors: A Concord, New Hampshire company, Lincoln Financial Securities Corp., sold the contents of an investment book written by another company’s chief executive officer. According to the Texas State Securities Board, six different agents of Lincoln, all based in Texas, put their names on the cover as co-authors with Mark Matson, the actual author. They used the book to attract clients and establish their own credibility.

However, the six agents didn’t write the book. They just wrote a preface to it.

Title of the book?

The Dirty, Filthy Lies My Broker Taught Me and 101 Truths About Money & Investing.

Ironic, eh?

After the Texas securities board inquired, David Booth, president of Lincoln Financial, told the Texas agents to stop using the book.

On June 15, 2010, Texas regulators entered a disciplinary order that fined Lincoln Financial $40,000 and reprimanded the firm. Read the order here.

What will they think of next?

If you hear of investment folks using deceptive practices to entice clients, write to Dave Lieber, founder of Watchdog Nation, at watchdog@star-telegram.com.

# # #

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

Many thanks to Rita Robison for naming Dave Lieber’s Watchdog Nation as one of the top 10 consumer books in 2009.

Just in time for the new revised and expanded 2010 edition which goes on sale today.

Here’s her list:

# # #

Did you read any helpful or inspiring consumer books during 2009?

Below are my choices for the best consumer books of the year. You can order them through my blog by clicking on the Amazon.com ad in the right column.

1. “2009 Action Plan: Keeping Your Money Safe and Sound” by Suze Orman. A plain-talking guide on how to take care of yourself during the recession and beyond.

2. “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care” by T.R. Reid. The Washington Post foreign correspondent traveled to Japan, Germany, France, Britain, and other countries to gather information on health care systems, using an old shoulder injury as a way to compare treatment plans.

3. “Other People’s Money: The Corporate Mugging of America” by Nomi Prins. The former investment banker describes how America got into its historic financial mess and how long it’s going to take to recover.

4. “Is America Driving You Crazy?” by Stephen Bezruchka, M.D. The University of Washington professor and emergency room physician says antidepressants are making Americans worse not better.

5. “Agenda for a New Economy: From Phantom Wealth to Real Wealth” by David Korten. Korten, cofounder of the Positive Futures Network which publishes Yes! Magazine, believes in the new economy, Wall Street will be shut down.

6. “Dancing in the Dark: A Cultural History of the Great Depression” by Morris Dickstein. A survey of the economics, politics, arts, daily life, and social legacy of the 1930s.

7. “Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong” by Dave Lieber. An award-winning guide to help you protect yourself as a consumer.

8. “Food Alert: The Ultimate Sourcebook for Food Safety” by Morton Satin. A guide to foodborne illnesses and how to prevent them.

9. “Our Daily Meds: How the Pharmaceutical Companies Transformed Themselves into Slick Marketing Machines and Hooked the Nation on Prescription Drugs” by Melody Petersen. The former New York Times reporter examines the pharmaceutical industry, and its influence on America’s medical system.

10. “Beyond Work: How Accomplished People Retire Successfully” by Bill Roiter. The psychologist and executive coach describes how people can transition from the 40-plus years as a career-focused adult and build new adult lives in which they evaluate their options and determine how they can develop personally fulfilling lives outside of work.

Add these consumer books to your library to improve help you improve your consumer choices.

Disclosure: When you order books through my blog on Amazon.com, I receive a small commission.

Copyright 2009, Rita R. Robison, Consumer Specialist

The man needed a job, and so he said that when the bank check for $1,950 arrived in the mail, he jumped at the accompanying offer to become a mystery shopper.

All he had to do was cash the check and send someone connected with the company part of the money as a Western Union money transfer. The rest was for him to use for mystery shopping to evaluate businesses, he was told. Afterward, he’d file reports about his experiences. Simple enough.

On Nov. 9, he went to his bank, Bank of America, but employees there told him they couldn’t cash the check. Since it appeared to be a Wells Fargo check, he was told to go there.

At a Wells Fargo branch in DeSoto, he was told to have a seat. Fifteen minutes later, a DeSoto police officer walked up to him and said, “Sir, can you stand and put your hands behind your back, please?”

“What?” the man asked.

As first reported in the Dave Lieber column in the Dec. 20, 2009 Watchdog column in the Fort Worth Star-Telegram, the man was arrested on suspicion of forgery of a financial instrument. On Nov. 30, he was indicted by a Dallas grand jury.

This is the first time I’ve seen a case where the apparent victim of a scam is arrested. But there are two important facts that must be disclosed.

First, the arrested man is Randolph Shaheed, 59, who in the late 1960s was one of Fort Worth’s most notorious gangster killers. He served 15 years in prison and is now on parole for life. (Watch a Mickey Grant documentary about him here.)

Second, he is one of the most honored ex-offenders in Texas. Two days before his arrest, the Dallas office of the state Parole Division held its annual Success Celebration, at which Shaheed was honored for helping ex-offenders succeed after they are freed.

When I asked the Texas Department of Criminal Justice to describe the award he received, the agency released a 171-word statement that describes his good deeds, calls him the ideal client and says he is “trying to promote positive change.”

How much Shaheed’s criminal record contributed to his current predicament is hard to say. He has a court date Tuesday, and the charges could be sorted out then. When I asked about his case, the DeSoto police and the Dallas County district attorney’s office mentioned his criminal background.

Shaheed said that when the mystery shopper offer arrived, he was in a confused state because his 20-year-old daughter, from whom he was estranged, had died suddenly Nov. 5.

At the time, he said he wasn’t aware that the mystery shopper ploy is a common scam. Targets of the scam are told to cash a check and send a portion of it to the purported mystery shopping company. The Federal Trade Commission says on its Web site: “The truth is that it is unnecessary to pay money to anyone to get into the mystery shopper business. ?.?.?.? Consumers who try to get a refund from promoters of mystery shopping jobs usually are out of luck. Either the business doesn’t return the phone calls, or if it does, it’s to try another pitch.”

Shaheed showed me e-mails from a Fred Mcguire of New York. (Read them here.) Shaheed said he believed that the e-mails were authentic — but they fit the classic scam. The best clue that something was wrong came in the task that Mcguire assigned him: Shaheed was supposed to visit his neighborhood Western Union office and describe all the mechanics of wire transfers from that office, including the name of money agents on duty.

When police confronted him at the bank, Shaheed said “he was a mystery shopper on the Internet,” according to a police report.

He spent four days in jail before his wife posted bail.

He is being represented by a public defender who didn’t return my calls.

Once released, Shaheed called Fred Mcguire in New York to tell him what happened.

“There’s something funny about the number,” he told me. “It just rang as if it were a phone booth or something.”

Shaheed has tried to explain that he was the intended victim of a scam.

“Doesn’t anyone want to listen to me?” he asked. “I’ve presented all the proof. I thought it was a check, brother. You know what I mean? I thought I was getting a part-time job.”

At Wells Fargo, the teller suspected that the check Shaheed presented was fraudulent, bank spokeswoman Helen Bow said. “She immediately notified the Police Department,” Bow said. She declined to answer other questions, referring The Watchdog to police investigators.

DeSoto police Capt. Ron Smith is skeptical of Shaheed’s story. “Don’t believe everything you hear,” Smith said. Although he acknowledged he had not reviewed the case file, Smith said he would be surprised if Shaheed was the victim of a scam.

In 1969, Shaheed, then known as Randolph Brown, killed a grocery store clerk in a bungled robbery attempt. Later that night, he attempted another robbery. All told, he shot at seven people, killing one and wounding two.

He was already infamous. Two years earlier, he had walked onto a Fort Worth bus holding a knife. When the driver kicked him and a friend off, he punched the driver, who started shooting. His friend was killed. He turned himself in on television at KXAS/Channel 5.

He was convicted of murder for the 1969 slaying and sent to prison, and he was paroled in 1984. After his release, he made a deal with the FBI to go undercover to break up a drug ring. Afterward, he was temporarily placed in the witness protection program. He testified against 17 defendants, the Star-Telegram has reported. All were convicted.

Then he became a minister and worked on many anti-gang programs for kids — his new life’s work. For that he was honored by the Parole Division. Excerpts from its statement released to me last week:

“With the last three years, Randolph Brown has become an advocate for other offenders. In 2005, Brown started a program now called ‘Ex-Offender’s of America Alumni Association,’ or XOAAA, where prison ministry goes beyond prayer.

“Through his program, Brown uses his voice, gifts, talents and ministry to bring forth healing for ex-offenders and those affiliated with them. The program promotes employment searches, how to get a job, finance management, spiritual counseling and more.

“The XOAAA program does not benefit just offenders but crime victims and family members as well.”

Brown also organized the Coming Up Program in Fort Worth, the statement says.

After praising his work on a radio program and cable TV, the Parole Division concluded, “Offender is more than just an ideal client. He is an advocate for ex-offenders trying to promote positive change within our community.”

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. His book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, won two national book awards in 2009 for social change. Twitter @DaveLieber